2024/11/04 by Adam Arian, John Sands, Habib Ur Rahman +1
Business, Management and Accounting · #Corporate Social Responsibility Reporting #Environmental Sustainability in Business #Management and Organizational Studies
paper · doi:10.1108/md-11-2023-2108
openalex publication_date 2024/11/04 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
Purpose This study uses instrumental stakeholder theory to explore the relationship between corporate social performance (CSP) and financial performance in various market sectors. It aims to show how CSP, driven by stakeholder demands in different markets, affects financial outcomes. Design/methodology/approach Using panel data analysis on data from 2007 to 2020, this research examines how stakeholder demand impacts a firm's ability to turn social performance into financial gains. The study ensures reliable results by addressing methodological and endogeneity issues related to CSP. Findings The results show that a firm's success in converting social performance into financial benefits depends on stakeholder demands in different markets. While better CSP generally leads to improved financial performance, the extent of this benefit varies based on stakeholder expectations. This highlights the importance of managers strategically addressing stakeholder demands to maximize financial returns from social initiatives. Originality/value By examining the CSP–financial performance link through the lens of market and stakeholder demands, this research provides new insights into how firms can strategically gain stakeholder support for financial benefits. It shows the long-term value of CSP as an investment that gains stakeholder support over time. This approach broadens the understanding of CSP by considering diverse stakeholder influences across industries, filling a gap in long-term CSP research.